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Intermediate 6 min read

Win rate and expectancy

A strategy is profitable only if the average trade is positive. Win rate alone says nothing.

Expectancy per trade in R (win rate × reward − loss rate × 1)Win rate ↓ / reward:risk →1R1.5R2R3R30%-0.40R-0.25R-0.10R+0.20R40%-0.20R+0.00R+0.20R+0.60R50%+0.00R+0.25R+0.50R+1.00R60%+0.20R+0.50R+0.80R+1.40RBefore fees. Fees and slippage subtract from every cell, which hurts small targets most.
Illustration for education. Prices are schematic, not real market data.

What it is

Expectancy is the average profit per trade in R: win rate × average win − loss rate × average loss. A 40% win rate with 2R winners has expectancy +0.2R per trade; a 70% win rate with 0.3R winners and 1R losers is negative.

You need enough trades (50 or more) before the number means anything, and you must include fees and slippage.

How to use it

  1. Record R for every trade.
  2. Compute win rate, average win, average loss.
  3. Check expectancy after costs.
  4. Only increase size when expectancy is positive over a large sample.
No edge, no size.

Common mistakes

  • Judging a strategy after five trades.
  • Ignoring costs.
  • Cherry-picking the best period.

Practise it in TradeDesk X

The Micro Performance panel shows win rate, profit factor, average R per trade, results by exit reason and by coin and an equity curve, with CSV export.

Open TradeDesk X Open Micro

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Risk-to-reward ratio

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Drawdown and the maths of recovery

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Educational content only. Nothing here is financial advice or a recommendation to buy or sell anything. Trading leveraged products can lose more than you deposit. Practise with paper trading first and never risk money you cannot afford to lose.